Nigerian Treasury Bills Closed at 21% Ahead of Inflation
Ahead of March inflation data, the average yield on Nigerian Treasury bills fell to 21% due to bullish momentum seen in the secondary market due to under-allotment at the main auction last week.
The market ended trading activities on a bullish note in the just concluded week. Traders reported that local investors picked up papers offloaded by foreign portfolio investors (FPIs) that rotated out from holding naira assets due to a shift in global investment sentiment.
There was heightened demand for Treasury papers after the monetary authority under-allotted bills offered at the primary market auction during the midweek. Coincidentally, offshore investors were in the sell mood. The buy and selling match helped to tame yield movement significantly in the secondary market.
Traders said investor sentiments diverge across the yield curve. On the short end, the average yield increased by 36 bps, while at the mid and long segments of the curve, average yields declined by 29 bps and 22 bps, respectively.
The Central Bank of Nigeria (CBN) sold less than the amount of Treasury bills offered to investors at the primary market auction conducted on Wednesday ahead of rebased consumer price index data.
Investors seeking to place huge amounts in Treasury bills returned to the secondary market to achieve portfolio balance, raising demand for the naira assets on Thursday.
Traders said trading activities reflected mixed sentiments, with early bearish pressure driven by foreign portfolio investors offloading long-dated papers, particularly the Feb and Mar 2026 maturities.
The sell pressure pushed the average mid-rate higher, according to fixed income market analysts’ notes. Activity slowed ahead of the Treasury bills auction, with thin volumes and limited buy-side interest.
The auction garnered strong demand with N1.126 trillion in subscriptions against a N800 billion offer, although only N424.58 billion was allotted—translating to a 47% under-allotment.
Stop rates rose 50 bps for 91-day bills to 18.50% and 100 bps for 182-day bills, which settled at 19.50%, respectively, while the 364-day bill held steady at 19.63%.
Despite some post-auction demand on the newly issued 1-year paper due in 09-Apr-2026, traders said offers were scarce; thus, investors directed their interest to the closest maturity (26-Mar-2026).
Overall, the average yield on Nigerian Treasury bills declined by 6 bps to settle at 21.05%, fixed income market analysts at CardinalStone Partners Limited said in an investor note. Short-term Interest Rates Fall on Robust Banking System Liquidity
